Diesel Cost and Market Areas Consider Figure 2–3 , which shows the market areas of sugar-beet processing plants. Suppose that an increase in the price of diesel fuel doubles the cost of hauling sugar beets from farms to processing plants. Modify Figure 2–3 to show the effects of higher transport costs. a. The slope of the net-price curve changes from _____ per mile to _____ per mile. b. If the number of processing plants remains at three, the net price received by the farm that is most distant from its closest processing plant changes from _____ per ton to _____ per ton.

QUESTION:

Diesel Cost and Market Areas

Consider Figure 2–3 , which shows the market areas of sugar-beet processing plants. Suppose that an increase in the price of diesel fuel doubles the cost of hauling sugar beets from farms to processing plants. Modify Figure 2–3 to show the effects of higher transport costs.

a. The slope of the net-price curve changes from _____ per mile to _____ per mile.

b. If the number of processing plants remains at three, the net price received by the farm that is most distant from its closest processing plant changes from _____ per ton to _____ per ton.